Centre Restricts Industrial Diesel Purchases to Safeguard Common Supply

The Centre has restricted industrial, commercial, and institutional diesel purchases from retail outlets to safeguard supplies for regular consumers. The decision follows abnormal surges in diesel sales at retail pumps due to price disparities. The Petroleum Ministry's order aims to prevent potential localised shortages and disruptions to essential services.

The Indian government has implemented restrictions on industrial, commercial, and institutional consumers purchasing diesel from retail fuel stations. This move aims to protect the supplies allocated for regular consumers amidst an unusual spike in diesel sales at petrol pumps driven by a shift from bulk channels to retail due to price differences.

A notification issued by the Petroleum Ministry on June 11 highlighted that the increase in sales of Motor Spirit and High-Speed Diesel through retail outlets is due to industrial, commercial, and institutional consumers opting for retail purchases. This switch has been made to take advantage of the price gap between retail and bulk sales, adding pressure to the supplies meant for retail customers.

In response, the government has enacted the Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, under the Essential Commodities Act. This regulation allows the government to direct public sector oil marketing companies and other authorized distributors to restrict these consumers from sourcing fuel from retail outlets, urging them to utilize their own consumer pumps instead.

The directive mandates that retail dealers limit diesel sales to vehicles or containers approved by the Petroleum and Explosives Safety Organisation (PESO), with a cap of 200 liters per day per customer or vehicle. The Ministry emphasized this measure is critical to ensure the availability of Motor Spirit and High-Speed Diesel for legitimate retail consumers and to prevent hoarding and diversion.

This action comes in the wake of global geopolitical tensions affecting petroleum supply chains, shipping logistics, and the availability of fuel products. The order will initially stand for 90 days unless revised, with violations attracting penalties under the Essential Commodities Act.